Phoenix Ins. Co. v. Spiers

• Decision Date: 24 May 1888
• Citation: 8 S.W. 453,87 Ky. 285
• Parties: PHOENIX INS. CO. v. SPIERS et al.
• Court: Kentucky Court of Appeals

8 S.W. 453

87 Ky. 285

PHOENIX INS. CO. v. SPIERS et al.

Court of Appeals of Kentucky.

May 24, 1888

Appeal from circuit court, Owen county.

Spiers & Thomas bring this action against the Phoenix Insurance Company, on a policy of insurance to recover the damages occasioned by the loss of insured tobacco by fire. The jury returned a special verdict, on which the court rendered judgment for plaintiff. Defendant appeals.

Wm Lindsay, for appellant.

Montgomery Lindsay & Botts, and O. B. Hallam, for appellees.

HOLT J.

The appellant, the Phoenix Insurance Company of Hartford, Conn issued to the appellees, Spiers & Thomas, of New Liberty, Ky. a policy of insurance of $1,200, for six months from February 20, 1883, upon 12,000 pounds of tobacco. It provided: "If the assured shall have, or hereafter make, any other insurance on the property hereby insured, or any part thereof, without the consent of the company written hereon, * * * this policy shall be void. * * * The assured shall forthwith give notice of loss to the company, and, as soon after as possible, tender a particular account of such loss, signed and sworn to by them. * * * The amount of loss or damage to be estimated according to the actual cash value of the property at the time of the loss, and to be paid sixty days after due notice and proofs of the same are made by the assured, and received at this office, in accordance with the terms of this policy. * * * Until such proof, declarations, and certificates are produced, and examinations and appraisals permitted, the loss shall not be payable. * * * This policy may be canceled at any time by the company on giving written or verbal notice to that effect, and refunding or tendering a ratable proportion of the premium for the unexpired term." The assured added other tobacco to the stock, and on May 4, 1883, the Liverpool, London & Globe Insurance Company issued a policy for two months, for $800, upon the entire lot, then amounting to 20,000 pounds. It was destroyed by fire on June 23, 1883, being then worth $3,000, and the total insurance on it being $2,000. The appellant never consented to the additional insurance by writing indorsed upon the back of its policy. The appellees now seek to enforce it. But two of the several defenses need be considered. They are-- First, that the preliminary proofs were not made; and, second, that the policy is not enforceable because of the additional insurance taken without the written consent of the appellant.

Soon after the loss occurred, the appellant had it investigated by its adjusting agent, and thereupon notified the appellees, in writing, that it considered the policy void, by reason of the taking of the additional insurance without its consent, and distinctly refused to pay upon this ground alone. This was equivalent to the company saying that it would be useless to furnish any preliminary proofs; that no form or degree of them would induce payment, and it would be but an idle ceremony to present them. Such conduct waives the necessity for their production before suit, although required by the policy. The stipulation is in favor of the insurer, and his conduct renders it an idle formality, the observance of which the law will not, therefore, require. Insurance Co. v. Stien, 5 Bush, 652; Martin v. Insurance Co., 20 Pick. 389; Thwing v. Insurance Co., 111 Mass. 110. Conditions affecting the risk itself are more strictly enforced in favor of the insurer than those relating to the mode of establishing a loss. In 2 Wood on Fire Insurance, § 496, it is said: "The production of proofs of loss, or defects therein, may be waived, and such waiver may be implied from what is said or done by the insurer." Another leading writer upon this subject says: "A distinct denial of liability, and refusal to pay on the ground that there is no contract, or that there is no liability, is a waiver of the condition requiring proof of the loss." May, Ins. § 469.

It is insisted, however, that there was a non-acceptance of this waiver; that the matter was reopened at the instance of the assured; and that they, therefore, could not thereafter sue without first furnishing these proofs. It appears that, soon after the refusal to pay, the attorneys of the appellees wrote to the company, saying that they believed it had been misled as to the facts, and requesting an investigation and remittance of the amount of the policy. The company replied that, if it had been misled, it would "entertain proofs to that effect." Evidently, the letter of the attorneys related alone to the refusal to pay upon the ground that the policy had been avoided by taking other insurance without the company's consent. The assured were induced by the insurer to believe that it based its refusal to pay upon this ground alone, and did not intend to insist upon the production of the preliminary proofs; and this refusal, so grounded, it never did withdraw, and is now insisting upon it. One of the special findings of the jury is that the company refused to pay upon this ground; and we think its conduct lulled the appellees into the belief that the mere preliminary proofs would receive no consideration. It will not, therefore, be heard to now defend because they were not furnished before suit.

It is insisted that the forfeiture provided by the terms of the policy, in case other insurance should be taken without the written consent of the appellant indorsed upon its policy was waived by it. A brief statement of facts is necessary to a proper understanding of this question: One Curtis was the agent of the company at New Liberty. Sometimes he styled himself its surveyor. He took applications for insurance, made the surveys, received the premiums, countersigned and delivered the policies to the insured, but did not issue them. He was the sole representative in that locality of the appellant, a corporation located in a distant state. One Vallandigham was loaning money upon tobacco in the vicinity of the appellees, and therefore desired its insurance. He agreed with Curtis, if he would divide his commissions with him, that he would bring to him the insurance upon all the tobacco in which he might thus become interested. This arrangement was unknown to the company; and between it and Curtis the powers of the latter, as its agent, appear to have been limited. It is not certain whether Vallandigham suggested the insurance of their tobacco to the appellees, or they to him. They doubtless believed he was an agent of the company. He so represented to them, and they obtained both policies of insurance through him; that is, he furnished the information and made the applications for the insurance, received the premiums, and paid the same, in one instance, to Curtis, and in the other to one Gayle, who was the local agent of the Liverpool, London & Globe Company. The policies were delivered by the agents to him; that in the last-named company being still in his possession when the loss occurred. There is evidence tending to show that it was the understanding between Vallandigham and the appellees that the additional insurance was to be taken out upon the 8,000 pounds of tobacco only. The testimony is conflicting as to whether he so applied for it. He signed the names of the appellees to the application for the insurance in the Phoenix Company, but in obtaining the additional insurance the agent of the Liverpool, London & Globe Company merely obtained from him information as to the property, and no formal application was made out. The policy issued, however, upon the entire 20,000 pounds; and the appellees, after the loss, proved it as such, without qualification, explanation, or conjecture, and obtained the $800 of insurance. It must therefore, as to them, be regarded as having been an insurance upon the entire lot of tobacco. Vallandigham certainly was not even purporting to act as agent for the appellant in obtaining the second policy. Nor can he be regarded as its agent as to the first one. The arrangement between him and Curtis was not binding upon the company. It had no knowledge of it. Curtis had no express authority from it to appoint another or a subagent. An agent ordinarily has no power to do so without the knowledge or consent of his...